Project Data Sheet (PDS): Details

Description

The Housing for Integrated Rural Development (HIRD) Program is a high priority component of Uzbekistan s Welfare Improvement Strategy (WIS) 2012 2015 for achieving inclusive growth and greater diversification of the economy. HIRD focuses on rural housing as an engine for economic transformation and accelerating rural development. Planned communities, modern house designs, new construction technology and materials, and more environmentally sustainable construction solutions are advancing the construction sector and providing opportunities for Uzbek entrepreneurs and industries. As part of HIRD up to 10,000 homes are being built per year, creating opportunities for up to 1,000 small rural contractors and 100,000 rural construction jobs annually. Improved access to nearby schools and clinics is a key part of this program. More reliable electricity, gas, and water supply, combined with community designs that include space for retail shops and commercial services, are opening up opportunities for home-based businesses. HIRD is an important driver for the 500,000 rural micro and small enterprises and home-based jobs targeted each year. On 31 August 2011, the Asian Development Bank (ADB) approved a $500 million multitranche financing facility (MFF) for the Housing for Integrated Rural Development (HIRD) Investment Program principally to provide financing to participating commercial banks (PCBs) for onlending to more than 40,000 targeted rural homebuyers. Under HIRD, subloans financed by the MFF help support construction of new modern houses built in planned rural community sites, with serviced land plots with electricity, gas, water supply and sanitation, and roads provided by local governments. Local governments also provide access to and improvements in nearby schools and medical clinics, and are making space available for new retail shops and commercial services.

Project Rationale and Linkage to Country/Regional Strategy

Uzbekistan s strong macroeconomic fundamentals have helped maintain high rates of economic growth over the last decade and resiliency during the global financial crisis. Gross domestic product growth has averaged 8% since 2004, per capita income has doubled in real terms, and absolute poverty has almost been cut in half, from 27% of households in 2000 to about 15% in 2012. While declining, rural poverty in Uzbekistan remains higher (20.1%) than urban poverty (13.4%). Higher rural population growth and increases in the working age population (from 54% in 2001 to 61% in 2010), along with shifts in the economy from agriculture to industry, means that rural jobs are harder to find. Urban migration and informal and seasonal employment are all rising. Key inputs needed to attract rural investment for job creation, and to retain entrepreneurs and skilled professionals in rural areas, include improvements in: (i) education and health services; (ii) telecommunications and reliable infrastructure; (iii) promotion of regional investment; (iv) access to finance; and (v) housing and living conditions. As part of HIRD, the MFF roadmap and policy framework links ADB investment support to the government's reform program. The overall program will improve the quality of life for rural households by: (i) increasing access to modern rural housing with related infrastructure, (ii) strengthening local government capacity for integrated rural planning and results-based delivery of rural services, and (iii) accelerating rural MSME development to diversify and increase rural jobs and attract regional investment in industry. The MFF supports the program implementation unit (PIU) and capacity development, as well as rural housing finance under the first component. Housing plots, related infrastructure arrangements, and associated commercial and social services are provided by the government. The second and third components, with accompanying reforms, are financed by the government with support from the PIU for monitoring and evaluation.

Impact

Improved rural housing for targeted beneficiaries.

Project Outcome

Description of Outcome

Downstreaming of the rural housing scheme for moderate and lower income beneficiaries, with a focus on women.

Progress Towards Outcome

ongoing

Implementation Progress

Description of Project Outputs

Housing loans provided by PCBs to targeted credit worthy subborrowers in rural areas Improved capacity of local governments to prepare and implement integrated rural development plans and investment promotion strategies Improved enabling environment for entrepreneurs and MSEs to establish or expand new businesses in rural areas

Status of Operation/Construction or Implementation Progress

ongoing ongoing ongoing ongoing ongoing ongoing

Safeguard Categories

Environment: FIInvoluntary Resettlement: FI-CIndigenous Peoples: FI

Summary of Environmental and Social Aspects

Environmental Aspect

Environmental impacts are anticipated to be insignificant. Each PCB will adopt an environmental and social management system (ESMS) with screening criteria and monitoring procedures to ensure that the subprojects have minimal or no adverse environmental or social risks.

Involuntary Resettlement

Only land sites with no involuntary resettlement impacts will be considered. The ESMS will also monitor this.

Indigenous Peoples

Only land sites with no indigenous peoples' impacts will be selected. The ESMS will also monitor this.

Stakeholder Participation and Consultation

During Project Design

The Housing for Integrated Rural Development Investment Program cuts across a number of development themes. Donor coordination focuses on three key themes: rural development, financial sector development, and local government capacity building. Close ADB donor coordination is maintained in these three themes and in cross-cutting areas, specifically governance, environment, and gender. With the World Bank, collaboration is supported in the financial sector, micro and small enterprises, local government, and cross-cutting governance issues including public procurement. Cooperation with the UNDP is achieving synergy on local government capacity building efforts and environmentally sustainable approaches for rural housing and community development. The Islamic Development Bank is evaluating cofinancing as part of its country programming process. Possibilities linked to plans to diversify small to medium enterprise programs have also been explored with Kreditanstalt fur Wiederaufbau (KfW).

During Project Implementation

The Housing for Integrated Rural Development Investment Program continues to work with a number of stakeholders to help achieve the objectives of the program. This includes working with district hokimiyats, mahallas, branch offices of the women's committee, and local youth groups around beneficiary selection, site selection and other local issues. To ensure efficient implementation of HIRD, four review missions were undertaken (December 2013, Apri-May 2014, August 2014, and September 2014) and a mid-term review mission is planned for November 2014. Extensive discussions are held with the government agencies and stakeholders and missions teams undertake field visits to meet beneficiaries, contractors, mohalla representatives, and regional government officers to assess first hand some of the positive impacts of the program.

Status of Covenants

Category

Rating

Loan 3039

Sector

–

Social

–

Financial

Satisfactory

Economic

–

Others

Satisfactory

Safeguards

Satisfactory

Project Financial Statements

–

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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